US OLEFINS: Spot ethylene has been on the rise, 0.50 cent/lb higher than the record lows seen April 9 after prompt-month was heard offered at 14 cents/lb MtB Nova. Sources have attributed the rise to the market finding balance after falling rapidly. Since then, April has been heard traded at 14.25 cents/lb MtB Nova for three straight days. Previous drops in pricing were due to continued length in supply amid new ethylene capacity and, more recently, weak demand particularly from the polyethylene sector, sources said. More than 3.5 million mt/year of new capacity has been added in the last 12 months, and nearly 4 million mt/year of additional capacity is expected online through December. Spot propylene has also been on the rise with sources citing stronger demand and refinery turnarounds tightening RGP supply. Expectations for April propylene contracts range from a down 1 cent to up 2 cents/lb, sources said. March contracts settled at 47 cents/lb for PGP and 45.50 cents/lb for chemical-grade product, each down 6 cents/lb from February.
US PE: US polyethylene buyers will continue to monitor spot availability, particularly for export, after industry data released last week showed gains in producer stocks for March. Export pricing moved mostly lower last week as sources pointed to increased availability for some grades, with the expectation that more could be coming before the end of the month. While pricing is coming more in line with levels needed for the export market, traders have noted additional declines were needed for some grades. In the domestic market, producers are again seeking a 3-cent increase in April after rolling the previously announced hike from March in the wake of contracts being heard settled flat. While domestic sales have been good, higher stocks and weaker feedstock ethylene prices were prompting some talk of rollover to potentially lower prices for April.
US PVC: Exporters continue to monitor global trends with a close eye on May pricing announcements out of Asia this week. Traders continued pushing for lower prices amid weak global demand with pricing indications talked as low as $830/mt FAS Houston. Some market sources said they thought prices would stabilize in May after falling $50/mt, or 5.6%, since February 28, while others said they expected further declines. Market sources said supply was robust, particularly as Shintech ramps back up after having finished a turnaround in March at its 1.4 million mt/year PVC plant in Freeport, Texas. But anemic global demand and low ethylene prices were adding pressure, market sources said.
US AROMATICS: US spot toluene prices climbed last week, rising 7 cents on the week to close Friday at 272 cents/gal as prices were bolstered by continued tight supply. The gains had a significant, negative impact on disproportionation economics, and TDP and MSTDP margins were last estimated at near $15 and $19/mt, respectively. Sources said that there was some demand for toluene from the gasoline blending segment as blenders worked to meet lower RVP specs. Toluene's blend value was at near 250 cents/gal, according to S&P Global Platts data. Sources anticipated little change in fundamentals this week and pricing was expected to face downward pressure in the near term amid pending supply improvements. Meanwhile spot mixed xylene prices rose sharply last week, gaining 20 cents to close at parity with toluene. Sources said the gains were driven by the supply side and demand remained stable from the downstream paraxylene sector, where spot prices continued to hover just above $900/mt. Sources anticipated that paraxylene prices would be flat to higher near term amid healthy demand from the PTA and PET segments related to the bottling season. PX economics were likely to improve in May, sources said, as mixed xylene prices move lower following the restart of at least two major producers in the US Gulf.
LATIN POLYMERS: Import pricing for spot cargoes of polyethylene and polypropylene are expected to remain stable or slip further as availability improves and traders turn to short sales to move product in what had been a stagnant buying market for much of March, sources said. Many buyers from Brazil to South America's Pacific Coast kept spot and contract volumes to a minimum last month with the expectation April would bring better availability from the US, sources said, adding that many PE traders opened the month motivated to move product before US producers potentially make more resin available for export in the second half of the month. PP buyers have talked the South American spot market as "oversupplied" after regional producers ramped up reduction in late February and throughout March on lower feedstock costs, sources have said. In the PVC market, West Coast South America buyers have seen import pricing fall much faster than their Brazilian counterparts, with availability from traditional trade partners serving as a key driver. As US export pricing has fallen, WCSA importers have enjoyed lower CFR pricing and similar pricing for Asian cargoes, while Brazilian importers have had to deal with limited exports from Europe, where production issues have hampered trade, sources said.
